With demand from people relocating to more sun-drenched markets thanks to an ability to work remotely already fading, many Sun Belt metros face a growing risk of seeing a downturn in their housing markets, according to a new analysis.
Not so in Greater Hartford.
According to a new analysis by economists with listings portal and brokerage Redfin, Hartford’s housing market is among the least likely nationwide to head into a downturn.
Hartford has several key advantages: low percentage price growth in 2021 relative to other metros, a low share of flipped homes and loss of population last year. Other metros near it on the list include Boston, Philadelphia and several Rust Belt cities like Cleveland, Ohio
Highly at-risk cities like Las Vegas, Nevada and Cape Coral, Florida saw home prices jump nearly 20 percent or more in 2021 on a year-over-year basis. Many also saw 5 percent or more of their homes flipped last year. And most saw their markets cool substantially in the first half of the year, while Boston’s has only slowed to what some agents describe as “2019 levels,” a year most observers would agree was anything but a soft housing market in Massachusetts.
But why are these factors pushing other areas closer to a potential drop?
“First, what goes up must come down,” Redfin Senior Economist Sheharyar Bokhari said in a statement accompanying the report. “Home prices soared at an unsustainable rate in many pandemic homebuying hotspots, both with second-home buyers and remote workers permanently relocating who were taking advantage of record-low mortgage rates. Demand driven by relocators and second-home seekers pulls back in an economic downturn, a trend that has already begun. Additionally, places where people tend to have high debt compared with their income and home equity are vulnerable because their residents are more likely to foreclose or sell at a loss.”